HSBC 2012 Annual Report Download - page 233

231
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Fiduciary risk
(Unaudited)
Fiduciary risk is the risk to the Group of
breaching our fiduciary duties when we
act in a fiduciary capacity as trustee or
investment manager or as mandated by
law or regulation.
A fiduciary duty is one where HSBC holds,
manages, oversees or has responsibility for assets for
a third party that involves a legal and/or regulatory
duty to act with the highest standard of care and with
utmost good faith. A fiduciary must make decisions
and act in the best interests of the third party and
must place the wants and needs of the client first,
above the needs of the Group.
We may be held liable for damages or other
penalties caused by failure to act in accordance with
those duties. Fiduciary duties may also arise in other
circumstances, such as when we act as an agent for a
principal, unless the fiduciary duties are specifically
excluded (e.g. under the agency appointment
contract).
During 2012, our principal fiduciary businesses
(the ‘designated businesses’) developed fiduciary
risk appetite statements for their various fiduciary
roles and a joint review was commissioned by
Global Operational Risk and RBWM to identify
businesses other than designated businesses
conducting fiduciary activities to ensure that they
were subject to adequate review and oversight.